1. Field of the Invention
This invention relates to a system for authenticating the identity of the user of an encoded document.
2. Prior Art
The use of credit cards in today's society is ever present. Credit cards are used to represent an exchange of money for goods and services in almost all locations and in almost all types of commercial establishments, including banks, restaurants, department stores, gas stations, tourist attractions, theaters, supermarkets and other retail outlets. Unfortunately, along with the almost universal use of credit cards there is a large incidence of credit card theft and subsequent use by unauthorized users. The most common method of checking whether the user is authorized to use the card that is being presented to complete a transaction is to compare the user's signature with the one on the signature strip. However, these comparisons are cursory at best, and the person making the comparison is rarely capable of detecting even the most rudimentary of forgeries. These signature comparisons are sometimes augmented by the employment of centralized credit information agencies. However, references to such agencies merely confirm that the cards or other instruments are authentic and that funds are available. These references do not confirm the identity of the user.
Previous attempts to provide means for verifying that the person using a credit card was the one authorized to do so have not proven to be successful. The systems previously produced have been overly complex and difficult to use by either the customer or the merchant or both. These systems have often been large and bulky. They have been difficult to manufacture and are very expensive. Many of the previous systems require access to a computer, which is a large expense occurring on a continuing basis. Because of the problems inherent with previous systems, their use has not been widespread. Because of the high costs involved, only large financial institutions have been able to use the previous systems. However, few of these institutions have found it advantageous to use any of the systems previously known. The previous systems for verifying the identity of a credit card user are impracticable for use by commercial establishments, particularly retail stores, gas stations and restaurants.
In addition, previous systems required complex encoding of credit cards. Such encoding included magnetic coding, which is very expensive and very susceptible to accidental alteration, and hole punching, which generally weakens the durability of the card.
Previous systems include the credit card verifier described by Appleton in U.S. Pat. No. 4,016,404. This system required a credit card reader and a specially adapted keyboard. These units make that system bulky and expensive and allow for more instances of unreliability. It employs microprocessor components which tends to increase the difficulty of manufacture and the costs of the system.
The system described by McCune, et al. in U.S. Pat. No. 4,016,405 requires a credit card reader, a keyboard, complex logic circuitry, including timing circuitry, a display unit, and access to a centralized computer. This system is very large, very expensive and is designed to be used by large financial institutions, preferably in cooperation with each other.
The system disclosed in Norwich, U.S. Pat. No. 3,728,522 requires a magnetically encoded card, a card reader, a writing unit, and complex circuitry. It also requires a series of actions by the system's operator.
The system described by Housman in U.S. Pat. No. 3,906,201 requires complex logic circuitry which, as described above, increases the cost of manufacture of the card verifying systems. This system also provides for the effective destruction of the card if a wrong entry is made, leaving little margin of error. The card itself must have electric circuitry embedded in it which greatly increases the cost of manufacturing the credit cards.
The systems described above are representative of the prior art which has so far produced bulky or stationary systems. These systems are complex and expensive and impracticable for widespread use.